The North American session is beginning with the USD relatively steady. The EURUSD, GBPUSD, USDCHF, USDCAD, and NZDUSD are all within 0.10% of the closing levels from yesterday. The biggest mover is the USDJPY with a change of 0.21%.
US CPI will be released at the bottom of the hour with the expectation of 0.2% MoM for the headline and 0.3% for the core. The YoY headline is expected to move up to 2.6% from 2.4% (a year ago, the data showed a 0.0%. That will drop out of the YoY calculations this year). The Core YoY is expected to remain unchanged at 3.3%, uncomfortably above 2.0% target.
Fed speakers today:
- Dallas Fed Pres Lorie Logan at 9:35 AM ET
- St. Louis Fed Pres Musalem at 1 PM ET
- KC Fed Pres Schmid at 1:30 PM ET.
US yields are also relatively steady with the 2 year up 0.7 bps after a move of about 9 bps higher yesterday. The 10 year is down -1.3 bps after its run higher yesterday.
US stocks in pre-market trading are trading lower after declines yesterday. Future are implying:
- Dow -67 points. Yesterday, the price fell -382 points
- S&P – 7.49 points after yesterday’s decline of -17.36 points
- Nasdaq -37.6 points after yesterday’s decline of also -17.36 points.
In other markets:
- Crude oil is up $0.28 or 0.44% at $68.39
- Gold is up $10.73 at $2608 after a few days of declines
- Bitcoin is steady at %$87,735 a day after breaching $90,000 for the first time (high reached $90,243).
EURUSD: The EURUSD made a second try to break below the old 2024 lows at 1.0601 today. Yesterday, the price dipped below the level but only to 1.05943. Today’s attempt bottomed at 1.05926 and failed again. The price has bounced to 1.06428 so fall. The low from May 1 at 1.0649 and then the triple bottom from three successive weeks in June at 1.0665 to 1.0670 are upside targets that need to be broken to give the buyers some hope. Absent that, and the sellers are still in control. A move below the lows and the next target area comes at a swing area between 1.0483 and 1.0533 (wide but real).
USDJPY: The USDJPY moved higher yesterday and back into a swing area target going back in time to April 2024 between 154.54 and 155.21. The price fell below that swing area in July with a test of the 155.21 high area before falling sharply. That high was tested today when the price high reached 155.23 just 2-pips above the extreme and backed off. The price is trading back in the middle of the swing area now and in the short term will still take a move below 154.54 (and staying below) to give the sellers some room to breathe. Absent that, and the buyers are still firmly in control. On a downside break below 154.54, the 153.88 swing highs from July 31 and then October 28 and October 29 would need to be broken and remain broken with the next target at the broken 61.8% of the move down from the July high at 153.397. A break above the highs at 155.21-23 opens the door for more upside momentum
GBPUSD: The GBPUSD dipped below the 61.8% retracement target during yesterday’s trading at 1.37322. The low reached 1.27183 but quickly bounced. The low today reached 1.2729 just 3 pips below that retracement level, before finding buyers again. The 61.8% seems to be causing traders cause for pause now. Having said that the upside is limited to a high of 1.2758 so far today. ON more upside there is not a lot of resistance until 1.27978 (call it 1.2800). Above that and the 200 day MA at 1.2818 and a swing area at 1.28329 to 1.28719 (including the 50% midpoint of the rance since the April low). ON the downside, there is a swing area between 1.26657 to 1.2685 to stretch toward on more downside momentum. Below that, and the 1.26137 would be eyed (lows from end of June and early July).
USDCHF: The USDCHF fell has traded above and below the 200 day MA at 0.8818 in trading yesterday and today. More recently, buyers have been holding support near the level giving them some hope for more upside momentum today. If so, the price needs to get and stay above the 0.88267 and continue to put more room between the 200 day MA and the price.
Conversely, a move back below and trader will instead look toward the 50% at 0.87986. Move back below that level and the stretch lower would look toward 0.8771 to 0.8776 swing area.
USDCAD: The USDCAD has traded up and down in a narrow range near highs. Yesterday the high price extended to 1.39664 for a new high for 2024, but fell short of the 2022 high at 1.3977. The 1.3945 was the old from August.and that level is holding support in the European session so far today. It would take a move and staying below to have buyers turn to sellers today and then targeting the 100 and 200 hour MAs at 1.3918 and 1.3911 respectively. A move below those MAs add to sellers comfort. . On the topside, getting above the high from yesterday at 1.3966 and the 2022 high at 1.3977 are needed to open the door to more buying in this pair.
AUDUSD: The AUDUSD moved below a swing area low at 0.65357 yesterday and although the price moved above that low, the momentum has been limited today. On the downside, getting below a swing area from the end of July and early August and again last week, came in between 0.65068 and 0.6511. Below that and 0.6471 to 0.6511 would be eyed.
NZDUSD: The NZDUSD has support at 0.5912. Yesterday the price dipped below that level to 0.59085 but failed on the break. Today the low could only reach 0.5917. On the topside, the low from two-weeks ago reached 0.59379 and that needs to be broken and stay broken IF the buyers are to have some hope for more upside.